High earners at Norfolk and Suffolk's local councils fall as budget cuts bite
PUBLISHED: 06:40 03 May 2016 | UPDATED: 08:16 03 May 2016
The number of high earners at the region's district councils has fallen considerably, with pressure on budgets meaning many authorities have taken the opportunity to trim the wage bill.
The second day of our series on public sector pay looks at nine councils and found that between 2010/11 and 2014/15 the number of staff earning £80,000-plus has fallen from 26 to 16. Those on £100,000 or above have also fallen from 11 in 2010/11 and 8 in 2014/15.
Many councils went through a period of upheaval from around 2010/11, with 201 exit packages handed out in the region, compared to 64 in 2014/15. Across the five years, which are the most recent figures available, 27 of the payouts were above £60,000.
The biggest spenders on exit packages across the five year period were King’s Lynn and West Norfolk Council at £2.4m on 80 payouts, though their totals fell considerably in the three years up to 2014/15.
A spokesman said the figures were linked to the early stages of a cost-reduction programme, which involved ‘significant changes’ to staffing structure.
She added: “We are now benefitting from taking early action, and the savings are accruing to our budget.”
The highest listed exit package went to former North Norfolk chief executive Philip Burton, £225,000 when he retired in 2013 at the age of 57 after more than eight years in the post.
Mr Burton said at the time his redundancy payment was £136,000 and the balance of around £89,000 was not money given to him, but the cost to the council of him accessing the local government pension fund.
No-one at the council was available to comment three years on, but at the time a spokesman said: “The cost of the severance payment was recouped with savings of more than £230,000 made within 12 months.”
The highest paid officer at any of the councils during the period in question worked for Yarmouth Borough Council, which broke its own remuneration policy to appoint an interim chief executive – on double the pay of the previous one.
The Yarmouth chief executive in 2012/13 earned £97,000 but in July 2014, following the serious illness of the permanent chief executive, it signed a contract with SOLACE recruitment agency to appoint Gordon Mitchell on £995 per day, plus VAT.
The contract was worth £154,225 for nine months work in that financial year, but ended on November 6, 2015 to allow Great Yarmouth Borough Council and North Norfolk District Council to test out a shared management approach.
A council spokesman said: “Following the serious illness of the permanent chief executive, Great Yarmouth decided in July 2014 to appoint another chief executive with the skills and experience to continue driving forward the council’s programme of work to improve services and efficiency, which was at a critical stage. The appointment was made on an interim basis to enable councillors to consider the next steps once this programme was well underway.
“Since November 2015, the borough council has shared on an interim basis a different chief executive, Sheila Oxtoby, the permanent chief executive of North Norfolk District Council. “This arrangement is expected to save taxpayers’ money at both councils, because the costs of the post are also shared.
“The appointment has been made on an interim basis to enable both councils to test out a shared management approach, giving councillors time to consider whether there is a business case for shared management in the future, without committing either council to any permanent arrangements at this stage.”
Meanwhile, South Norfolk has seen a big rise in what its chief executive earned - from £113,873 in 2009/10 to £127,126 in 2014/15- an increase of 11.6pc.
Jonathan Pyle, the council’s communications manager, said: “The chief executive’s salary increased in line with national pay awards and the council’s performance related pay policy between 2009/10 and 2014/15 from £113,873 to £121,072.
“The figure of £127,126 includes a non-consolidated performance related payment agreed by the council.”
Suffolk Coastal and Waveney district councils were two of the first in Suffolk to appoint a joint chief executive in 2008.
Leaders, councillors Ray Herring and Colin Law, said: “This partnership working has played a key role in both councils’ ability to drive down costs and provide more efficient frontline services, giving local taxpayers better value for money.
“It has already contributed to the councils making £16 million efficiency savings and we are committed to continuing to develop this partnership.”
Payments made to senior public servants may provoke concern from taxpayers – however they pale in comparison with top chief executives in the private sector.
According to the High Pay Centre, the average pay reported for a FTSE 100 CEO in 2014 was £4.96 million, with the highest individual salary reaching £42.98m.
In contrast, Simon Kirby, the highest paid public servant in the UK, earns £750,000 a year as the chief executive of High Speed 2 Ltd, the publicly owned company set up to deliver the UK’s new fast rail connections.
But while the very highest salaries tend to arise in private companies, average wages remain higher in the public sector.
According to the Office for National Statistics’ Employment and Labour Market report, median weekly earnings for full-time employees have been higher than the private sector since the data series began in 1997. Average private sector earnings were £501 weekly in April 2015, compared with £589 for the public sector.
WHY SO MUCH?
The use of “interim positions” in senior public sector roles is said to be costly and a reflection of the lack of specialist skills within the sector – but our investigation found widespread use of such appointments.
Interim positions are made on a short-term basis, often employed by organisations to help troubleshoot problems. They are frequently recruited through agencies, however, which incur additional costs.
Figures produced by the Interim Management Association indicate the use of such positions in the public sector has reached the highest levels since 2009. According to Ipsos MORI data, the public sector’s contribution to completed assignments increased from 40pc to 49pc during the third quarter of 2014.
The growing use has been blamed on staff cuts in the public sector, according to an article in HR Magazine.
Although the House of Commons committee of public accounts said the public sector’s dependence on interim staff “reflects a lack of specialist and professional skills within government”, there are also advantages.
Interim positions are said to offer greater flexibility than permanent roles and can be used to deliver one-off projects, or address politically charged issues from an outside perspective.
Some of the organisations in Norfolk and Suffolk to have made significant use of interim positions include: Norfolk and Suffolk county councils and the region’s hospitals.